DVD sales down by 20%, Netflix subscriptions up 33%

Is the DVD format about to die out? According to a report by the Digital Entertainment Group, DVD sales in the US, Q1 2011 have dropped 20% when compared to Q1 2010. Studios blamed the fall in sales due to quirks in release cycles, but observers aren’t entirely convinced.

The popular online movie streaming service, Netflix, grew 33% when compared in the same time frame. A huge difference when compared to DVD sales. But a 33% growth might not mean much if the total number of Netflix subscribers don’t surpass the amount of consumers that still purchase DVDs. Are Americans finally abandoning physical media and going completely digital?

With digital services offering a large number of advantages over traditional DVDs, it’s hard to see why not. Consumers don’t have to wait in line to purchase movies, consumers have the ability to shop any time they want, and they can even pay monthly fees for an unlimited amount of shows on some services. The obvious disadvantage of online services is the reliance on internet or the video service. If it’s down, that means no movies or shows for consumers. DVDs aren’t affected by such problems.

However, Q2 2011 is looking good for now – sales of DVDs are up 20%, so it looks like movie studios are back on track. I guess people still enjoy purchasing DVDs for their collections, not to mention for the nice bonuses that are bundled together with box sets. The demise of the DVD for serving movies is pretty certain, just like how VHS tapes have been replaced – it’s only a matter of time. What are your thoughts on streaming movies vs purchasing DVDs – which do you prefer?